Study On Development Mechanism Of China’s EPC Project Based On System Dynamics

In recent years, the EPC general contract model is more and more popular in the global construction market. Compared with the traditional mode, it has the following advantages:from the owner’s perspective, it has lower risk and transaction costs, easier contract management, shorter construction period and higher quality of the project; in the terms of the general contractor, it can improve their profit space; from the social point of view, it contributes to the specification of construction market, to the improvement of the economy of projects and the quality of construction industry. But in the current, EPC mode in China is still in the exploration period, and it develops very slowly since its implementation. There are many problems, such as lack of standard documents and laws and regulations on the specific implementation aspects; the general contractors’ability is uneven and is far from international well-known general contract firms, and their internationalization level is still low; in the owner’s idea there still exists misunderstanding of EPC mode and the management and operation level is low. This paper takes the EPC general contract model market as the research object, using the method of system dynamics, analyzed the development mechanism of EPC general contract mode in China to find out countermeasures and suggestions to promote the EPC mode in China rapid development.First of all, through the research of the implementation conditions of EPC general contracting mode in American market, and combined with the status and problems in our country, analyzed the restriction factors that affected EPC mode development in China. In terms of the system, the restriction factors are the lack of relevant laws and regulations, and the financial guarantee mechanism, the project guarantee mechanism and the construction market credit mechanism is not perfect, and the standardization is deficiency. From the market subjects aspects, the restriction factors are the owners’lack of power of implementing the EPC general contracting model and the deficiency of general contract market. Implementation cost factors are transaction cost, organization costs, learning costs and risk costs that hinder the development of EPC model.Then, drew the causality diagram of the influence factors that affect EPC mode development, by using the theory of system dynamics, and constructed the system dynamics model based on the transaction cost factor. Using Vensim PLE software simulated the system model, and through the sensitivity analysis and strategy design, found out that the sensitive factors influencing the behavior of the system most are the government expectations on the development level of the EPC mode and consummation degree of the related system. This shows that the government subject plays a key role in promoting the development of EPC mode.Finally, according to the sensitivity analysis of the factors, put forward some specific policy recommendations such as improving the bidding system of EPC general contract mode, perfect contract system and establish the project general contracting enterprise qualification management system and so on to promote the rapid development of the EPC mode.